Chapter 15: SERVICES MARKETING. I. Services marketing.
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Transcript of Chapter 15: SERVICES MARKETING. I. Services marketing.
Chapter 15:
SERVICES MARKETING
I. Services marketing.
Services marketing
• The important of service marketing.
• Characteristics of services marketing.
• The extended marketing mix for services.
• The importance of people.
• Service quality.
The important of service marketing.
• Services are the distinguished from products mainly because they are generally produced at the same time as they are consumed and cannot be stored or taken away. An enhanced marketing mix needs to be deployed.
Services marketing.
• The growth of service sector in advanced industrial societies.
• An increasingly market-oriented trend within service-providing organizations
II. Characteristic of services marketing
Intangibility…..• Refers to lack of
physical substance.
• Involved with services delivery.
This insubstantiality is a continuum
Marketing entities
• Tangible
• Intangible–By customers opinions–By the offering of marketer to customer
something tangible to present the purchase.
Marketing implications…(enhance tangibility)
• Increasing the level of tangibility
• Focusing the attention of the customer on the principle benefits of consumptions.
• Differentiating the service and reputation- building.
Owner ship• Services do not result in the transfer of
property.
• An item of service provision is defined by the length of time it is available.
Ownership (cont’…)• Lessen the perceived customer value of a
service.
• Make for unfavourable comparisons with tangible alternatives.
• Attempt: providing symbolic tangible items.
A service cannot be
separated from the provider of
the service
The performance of a service
often occurs at the same
moment as its consumption
Marketing implication
Providing marketing services may not be separated from the providers
Increasing the values of quality and reliability
Transferring customer service ethic to the service provision
The need for customer orientation
2.4 Perish ability • Services can not be stoned
Managers need to change the services in their availability (capital, labor force …) for the
period of time to meet customer needs
There are 2 risks
Inadequate level of demand -> accompanied by substantial fixed cost
Excess demand may result in lost custom through inadequate service
Policies must seek to match demand with supply by price variations and promotions
2.5/ Heterogeneity and variability
It is difficult to attain:• Precise standardization of the service
offered • Influences or control over perceptions of
what is good or bad customer service
Problems of Maintaining consistency in the standard of
services Variability of quality in delivery
Marketing implication
III. THE EXTENDED MARKETING MIX FOR
SERVICES
The additional elements
4Ps are extended for services to make 7Ps, including:
ProductPricePlace PromotionPeopleProcessPhysical evidence
The additional elements (cont’d…)
• People provide services: wrong service -> spoiled service
• Services are provided through process (number of sequential steps): spoiled service can appear at any step in the sequence
• Physical evidence (ambience) can be a maker or spoiler of the service
The additional elements (cont’d…)
An alternative approach identifies 4 extra Ps:
• Personal selling
• Place of availability (operations management)
• People and customer service
• Physical evidence
Personal selling
Personal selling is very important in the marketing of services, because of:– The greater of perceived risk– The greater uncertainty about quality and
reliabilityPersonal contact with a competent,
effective representative may provide the necessary confidence when consumers seek reassurance
Place of availability
• Place of availability is really covered by the distribution system
• There are special problems for services in operations management
Place of availability (cont’d…)
The level and quality of service are sensitive to the processes by which services are delivered. There are 3 key factos:
• Capacity utilisation• Managing customer contact• Establishing objectives within the non-for-profit
sector Minimising exposure to negative feedback, and
promoting the dissemination of positive messages about the service are important
People and customer service
• To satisfy customers, the physical presence of people is a vital aspect
• Customer orientation is needed in all sectors organization activity
People and customer service (cont’d…)
Evidences of customer orientation on the part of staff include:
• Appearance• Attitude• Commitment• Behaviour• Professionalism• Skills• Discretion
People and customer service (cont’d…)
• The staff role in adding value is very crucial when improve higher level of customer contact
• The delivery of the service and physical presence of the personnel involved are completely inseparable
Physical evidence
• The remedy for intangibility of the product is physical evidence
• Physical evidence may:Associate with the service itself (e.g: credit
cards)Buid up by identification with a specific
individualIncorporate into the design and
specification
IV. The importance of people
• Selection and training
• Internal marketing to promulgate the culture of service within the firm
• Ensuring conformance with standards:– Behavior– Dress and appearance– Procedures– Modes of dealing with the public
Service marketing organizations have to emphasize:
Con’t…
• Mechanising procedures where possible
• Constantly auditing personnel performance and behavior
• Extending the promotion of the service and its qualities into the design of service environments and the engineering of interactions between staff and customers and among the customers them selves.
V. COMPONENTS OF SERVICE QUALITY
5.1 Service Quality
Definition
• Service quality is the totality of features and characteristics of that service which bears on its ability to meet customer needs.
• Quality can only be defined by customers
Improving service quality
Two ways:
• Higher sales revenues
• Improved productivity and reduced costs
Grönroos' Service Quality model
5.2 COMPONENTS OF SERVICE QUALITY
• Two principal components
• Mediating influence
• Major determinants
• Methods to improve
Two principal components
• Technical quality: What the customer is left with, when the production process is finished.
• Functional quality: How the customer receives the technical quality in the interactions between customer & service provider & other customer.
Mediating influence
Image: View of the company
Major determinants
2 major quality dimensions:
- People
- Infrastructure and process
People
7 factors:
• Reliability
• Responsiveness
• Communication
• Credibility
• Competence
• Courtesy
• Understanding customers’ needs
Reliability
Accuracy and Dependability
Getting it right in the first time
Responsiveness
• Ability to address all issues
• Willingness to deal with customer’s queries
Communication
• Non-technical language
• Easily to access informations
Credibility
• Honest
• Trustworthy
• Willingness to share negative references
Competence
• Understanding product range
• Interpreting the needs of the customers
Courtesy
• Polite
• Respectful
• Friendly
Understanding customers’ needs
Use customer record to know customers’ need
Infrastructure and process
3 factors:
• Tangibles
• Security
• Access
Tangible
• Physical evidence: Report, Inspection
• Quality of fixtures
Security
• Private
• Confidential
• Restriction to access customer database
Access
• Fair queuing system
• Avoid customers’ irritation
• Pleasant relaxing environment
Methods to improve
• Develop customer orientated mission statement• Support for quality improvement initiatives• Regular customer satisfaction research• Monitor standards and communicating results• Establish systems for customers complaints and
feedback• Encourage employee participation• Reward excellent service